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2010 DIGILAW 3658 (ALL)

DABUR INDIA LIMITED v. STATE OF U. P. .

2010-12-06

PRAKASH KRISHNA, YATINDRA SINGH

body2010
JUDGMENT These writ petitions were heard together and are being disposed of by a common judgment as the identical questions of fact and law are involved. In Writ Petition No. 1242 of 2003, assessment year involved is 2001-02 while in Writ Petition No. 1373 of 2003, assessment year is 2000-01. For the sake of convenience the facts from Writ Petition No. 1242 of 2003 are noted. Challenging the legality and validity of the reassessment notices issued under section 21 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, "the Act") for the aforesaid two assessment years, the present writ petitions have been filed. The petitioner is a public limited company and is manufacturing and selling the ayurvedic medicine, hair oil, tooth powder, tooth paste, etc. During the course of assessment proceedings, for these assessment years, the assessing officer confronted the petitioner with the survey dated 13th August, 2001 conducted by the S.T.O. (S.I.B.) at C.S.D., Meerut. In the said survey, certain materials relating to the petitioner/dealer for these assessment years were found against the petitioner. On the basis of the report submitted by the S.T.O. (S.I.B.) a show-cause notice was issued by the assessing authority. The said notice was replied by the petitioner. The assessing authority considered the matter in detail and found that the explanation furnished by the petitioner is satisfactory. The assessment for the assessment year 2001-02 was completed on May 5, 2003 and assessment for the assessment year 2000-01 on December 30, 2002. Subsequent thereto, the impugned notices for reassessment were issued. In the notice for reassessment proceedings, the following reasons have been recorded. On inquiry it was found that the goods were not passed through the check-post, namely, Sahayta Kendra Mohan Nagar and the purchase bills do not contain the O.C. certificate. Therefore, the question of sending the goods to C.S.D., Meerut, does not arise and the sales disclosed to C.S.D., Meerut, appears to be fabricated one. On further inquiry, it is not possible, taking into consideration the strength of labour available at C.S.D. Canteen, Meerut, to unload around forty trucks in a day. Therefore, unloading of the goods at C.S.D., Meerut, is doubtful. From the certificate issued by the C.S.D. Canteen, Meerut, it appears that the petitioner has made sales of Rs. 17,84,81,637 while the C.S.D., Meerut, in its assessment proceedings, in the purchase list has disclosed the purchases of Rs. 3,90,56,661. Therefore, unloading of the goods at C.S.D., Meerut, is doubtful. From the certificate issued by the C.S.D. Canteen, Meerut, it appears that the petitioner has made sales of Rs. 17,84,81,637 while the C.S.D., Meerut, in its assessment proceedings, in the purchase list has disclosed the purchases of Rs. 3,90,56,661. Evidently, the petitioner is claiming undue benefit on the basis of forged certificate issued by the C.S.D., Meerut. In the purchase list filed by the C.S.D., Meerut, the bills amounting to Rs. 13,69,121 are those bills which do not find mentioned in the certificate. In the purchase list of C.S.D., Meerut, the purchases of Rs. 33,72,058.28 shown in the certificate, are not reflected. Challenging the aforestated notices, the present writ petitions have been filed on the ground that the notices have been issued on insufficient grounds. Heard Shri Bharat Ji Agrawal, learned senior counsel, along with Shri Piyush Agrawal, learned counsel for the petitioner and Shri A. C. Tripathi, learned standing counsel, for the respondents. Considered the respective submissions of the learned counsel for the parries. The principal issue mooted is whether it is a case of change of opinion. The argument of the petitioner is that it is a case of change of opinion inasmuch as the entire material was considered in detail by the assessing officer while framing the assessment orders. We have perused the assessment orders. The assessing officer in a very detailed order discussed all the above issues therein. The report of the S.T.O. (S.I.B.) was made available to the assessing officer before hand. Keeping the report of the S.T.O. (S.I.B.) in the background of the mind, a comprehensive show-cause notice was issued by the assessing officer to the petitioner. The points on which the show-cause notice was issued, have been mentioned and discussed in detail in the assessment orders. The assessing officer was satisfied with the reply of the petitioner. He has examined the matter in great depth with the help of account books and attending circumstances of the case. The petitioner has disclosed the modus operandi of the business. It was explained that the purchase orders are received from the Canteen Store Department situate at Mumbai to Dabur India Limited. The purchase orders thereafter transmitted to Shahibabad warehouse through enter office memo. Thereafter the goods were booked through challan by road transport to the Canteen Store Department., Meerut. The petitioner has disclosed the modus operandi of the business. It was explained that the purchase orders are received from the Canteen Store Department situate at Mumbai to Dabur India Limited. The purchase orders thereafter transmitted to Shahibabad warehouse through enter office memo. Thereafter the goods were booked through challan by road transport to the Canteen Store Department., Meerut. After delivery of the goods, a copy of the G.R. signed by the store in-charge is obtained as the receipts of delivery of goods. The Canteen Store Department, Meerut records the receipts of the goods in warehouse receipt register, form No. 2. The number of form No. 2 and date were noted on the invoice. Thereafter, the Canteen Store Department, Meerut, dispatches the goods onward. The assessing officer on consideration of material found that the sales turnover as disclosed by the petitioner to the Canteen Store Department is verifiable. He has arrived at the above conclusion on the basis of account books and documents produced before it. He examined the invoices, etc., and was satisfied that the disclosed quantity of goods were sold by the petitioner to the Canteen Store Department, Meerut. The said invoices produced by the petitioner contain the necessary particulars such as G.R. number, date, etc. There was nothing to doubt about its genuineness. The case of the petitioner that as a matter of fact, the majority of purchase orders were received by the petitioner, sale/marketing office, Delhi and therefrom the directions for disbursement of the goods were made, has been accepted. Ultimately, the assessing officer has accepted the disclosed inter-State sales and has also accepted the disclosed turnover amounting to Rs. 24,35,19,056. It has accepted the disclosed turnover of Rs. 23,55,19,056 to the Canteen Store Department, Meerut and has granted the exemption thereon. The assessment orders would show that the assessing officer was conscious of facts, which were found in survey dated August 13, 2001 and also the report submitted by the S.T.O. (S.I.B.) drawn in pursuance of the aforestated survey. The assessing officer took the said report into consideration while framing the assessment orders. In other words, the assessing officer has applied its mind to the facts which were found in the aforestated survey. It addressed those facts in his assessment orders and took a conscious decision by accepting the petitioner's versions. The assessing officer took the said report into consideration while framing the assessment orders. In other words, the assessing officer has applied its mind to the facts which were found in the aforestated survey. It addressed those facts in his assessment orders and took a conscious decision by accepting the petitioner's versions. In this fact-situation, we find sufficient force in the argument of the learned senior counsel for the petitioner that there being no fresh material, the assessing officer could not initiate the reassessment proceedings under section 21 of the Act, as held in Harbans Lal Malhotra v. Assistant Commissioner, Sales Tax, Ghaziabad [1997] 107 STC 98 (All); [1994] UPTC 1041 (All). Section 21 of the Trade Tax Act enables the assessing authority to reassess a dealer to tax if it has reason to believe that the whole or any part of his turnover for any assessment year or part thereof has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than that at which it should have been assessed or where any deduction and exemption has been wrongly allowed in respect thereof. It does not permit reassessment of turnover which, after due consideration, had been found not exigible to tax. There being no fresh material in possession of the assessing officer, the assessing officer in the garb of reassessment proceedings cannot be permitted to re-look the matter. The contention of learned counsel for the petitioner that all these aspects were considered at the time of the assessment proceedings by the assessing officer and therefore, the authority concerned had no jurisdiction to initiate the reassessment proceedings has force. The learned standing counsel could not support the action of the authority below. When the matter was heard earlier this court had directed the learned standing counsel to produce the record. The learned standing counsel produced the record before this court at the time of hearing of the writ petitions. This being so, there was no justification for initiating the reassessment proceedings. No fresh material was there before the assessing officer to form a belief that the turnover of the petitioner has escaped assessment. In view of the above, we find that it is a case of change of opinion and there was no material for the assessing officer to initiate the reassessment proceedings. No fresh material was there before the assessing officer to form a belief that the turnover of the petitioner has escaped assessment. In view of the above, we find that it is a case of change of opinion and there was no material for the assessing officer to initiate the reassessment proceedings. In the result, both the writ petitions succeed and are allowed and the impugned notices under section 21 of the Act are hereby quashed. The reassessment proceedings are set aside. No order as to costs.